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What if…Financial incentives were better aligned across hospital and community settings by combining activity-based fundin...
Main Issue<br /><ul><li>Currently, funding policies for acute and post-acute care are not aligned to achieve efficient pat...
Proposed Option<br />	Blending activity-based funding (ABF) with global budgets for funding acute and post-acute care (sep...
Evidence<br />ABF generally creates financial incentives that promote volume and efficiency. <br />Hospitals<br />ABF asso...
Shorter lengths of stay
Lower mortality (perhaps)
Increase in overall spending on hospital care (due to higher volume)</li></ul>Post-Acute Care<br /><ul><li>Rehabilitation:...
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WHAT IF: Financial incentives were better aligned across hospital and community settings by combining activity-based funding and global budgets?

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Trafford Crump, University of British Columbia

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WHAT IF: Financial incentives were better aligned across hospital and community settings by combining activity-based funding and global budgets?

  1. 1. What if…Financial incentives were better aligned across hospital and community settings by combining activity-based funding and global budgets?<br />Trafford Crump, PhD<br />Understanding Options to Improve Efficiency in Healthcare Spending and Healthcare Financing<br />Toronto, ON<br />July 10, 2011<br />
  2. 2. Main Issue<br /><ul><li>Currently, funding policies for acute and post-acute care are not aligned to achieve efficient patient flow </li></ul>e.g., alternative levels of care (ALC) observed across provinces <br />Those patients formally discharged from acute care, but for whom appropriate discharge location is not available <br />Acute hospital care historically funded through global budgets:<br />Disincentives for discharging patients to post-acute care and increasing volume (i.e., exchanging relatively less expensive patients for relatively more expensive patients)<br />No reward for improving quality or efficiency<br />Post-acute carehistorically funded through a mix of global budgets + capitation: <br />Disincentives for PAC facilities to accept more complex patient types<br />No reward for positive outcomes<br />
  3. 3. Proposed Option<br /> Blending activity-based funding (ABF) with global budgets for funding acute and post-acute care (separately) is one funding option under consideration by policy makers<br />ABF remunerates facilities based on volume of services + characteristics of the patients<br />Patients assigned to unique groups based on clinical and demographic information <br />Each group is associated with a predetermined funding amount<br />
  4. 4. Evidence<br />ABF generally creates financial incentives that promote volume and efficiency. <br />Hospitals<br />ABF associated with:<br /><ul><li>Higher volumes of care
  5. 5. Shorter lengths of stay
  6. 6. Lower mortality (perhaps)
  7. 7. Increase in overall spending on hospital care (due to higher volume)</li></ul>Post-Acute Care<br /><ul><li>Rehabilitation: ABF has reduced episode costs and lowered length of stay
  8. 8. Long term care: Lowered per incident costs and (some evidence) improves performance scores
  9. 9. Home care:No evidence</li></ul>Transition between facilities<br /><ul><li>No evidence</li></li></ul><li>Challenges<br />Hospitals<br />ABF initiatives may be moot if no post-acute care location available (e.g., ALC will rise)<br />Policy-makers have to be prepared for an increase in costs<br />Post-Acute Care<br />Timely and reliable data in post-acute care is limited (needed for setting prices)<br />Some evidence from the US to suggest that public/private facilities react differently to ABF<br />Unclear if there is the physical capacity in post-acute care for effective ABF initiative<br />Transition between facilities<br />Implications of introducing ABF on ALC utilization is unknown<br />
  10. 10. Implications for Canada<br />Transition between acute and post-acute facility is a growing issue in Canada<br />e.g., ALC utilization rising across many provinces<br />This may be exacerbated by ABF initiatives for funding hospital care<br />A complimentary post-acute care funding initiative is needed<br />But whether or not ABF for post-acute care is an effective funding initiative is unknown<br />Such an initiative should encourage coordinated care and shared accountability for patient outcomes across facilities<br />
  11. 11. www.hospitalfunding.ca<br />Trafford Crump<br />tcrump@chspr.ubc.ca<br />

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